THE COLUMBUS DISPATCH 
Blackwell reports shares in Diebold 
Tuesday, April 04, 2006 
 Mark Niquette 
 
Ohio Secretary of State J. Kenneth Blackwell revealed yesterday that he owned stock in Diebold, a voting-machine manufacturer, at the same time his office negotiated a deal that critics have said was an attempt to steer business to the company. 
 
But Blackwell said his investments were handled by a financial manager without his advice or review, and after he discovered during the past weekend that he owned stock in Diebold Inc., he sold his shares yesterday at a loss. 
 
Controversy has swirled around Ohio-based Diebold and its voting machines since its former chairman pledged to deliver victory for President Bush in Ohio in 2004 and Blackwell’s office changed directions last year about which voting devices could be used. Blackwell also was Bush’s Ohio co-chairman. 
 
Blackwell, the leading Republican candidate for governor this year, considers the issue settled. But Democrats and Attorney General Jim Petro, Blackwell’s rival for the GOP nomination, are calling for an investigation. 
 
"Considering Ken Blackwell’s history with Diebold, I think this warrants further investigation to remove any hint of impropriety," said Bob Paduchik, Petro’s campaign manager. 
 
Yesterday was the deadline for candidates in the May primary to file financial-disclosure statements detailing gifts worth more than $75, travel, meals and sources of income and debts. 
 
It was the first reporting period since Gov. Bob Taft and four former members of his administration were convicted for failing to list gifts on their forms. 
 
Among the other details in yesterday’s filings: 
 
• Petro, like Blackwell, showed investments in more than 100 stocks and mutual funds, while U.S. Rep. Ted Strickland, the leading Democratic candidate for governor, didn’t report any. 
 
• Blackwell accepted more than $7,200 in travel last year, including a $4,417 trip to Rome from the Becket Fund for Religious Liberty to speak at a conference and a $919 trip to Texas to speak to the Texas Restoration Project, a group of conservative religious leaders. 
 
• House Speaker Jon A. Husted reported as a gift a stay in the Florida home of a lobbyist’s father last Memorial Day weekend — even though Husted says he paid fair market value for the stay and was, he said, overreporting the item. 
 
Blackwell filed a letter with his report in which he said that the stocks in his multimilliondollar portfolios are handled by a financial manager who does not consult him on specific decisions. 
 
Blackwell said that a past manager was given verbal instructions about stocks to avoid. But Blackwell changed managers at the end of 2004, and the new one did not follow those instructions and bought 178 shares of Diebold stock in January 2005 for $53.67 a share, or $9,553. 
 
Blackwell said he conducts an annual review of his holdings when his report is prepared and first discovered this weekend that he owned stock in Diebold, whose primary business is making automated teller machines. 
 
He said 95 shares were sold sometime last year at a loss of $15.68 a share, and the remaining shares were sold yesterday at a loss of $12.41 a share. 
 
"While I was unaware of this stock in my portfolio, its mere presence may be viewed as a conflict and is therefore not acceptable," Blackwell wrote, adding that he is moving his portfolio to a blind trust. 
 
Even so, neither Petro nor Democrats were satisfied. 
 
"If he doesn’t know what’s going on with his own checkbook, why in the world would voters want him to be in charge of the checkbook as governor?" said Brian Rothenberg, state Democratic spokesman. 
 
Blackwell spokesman Carlo LoParo said Blackwell was not involved in negotiating the deal for voting machines with Diebold. 
 
"It’s a small stock purchase that was sold at a loss as part of a multimillion-dollar portfolio," LoParo said. 
 
After initially declaring that counties could buy only optical-scan devices in January 2005, Blackwell issued a new directive three months later saying his office had negotiated a best-in-the-nation price for Diebold touch-screens. 
 
Rival vendors and several counties complained that Blackwell was trying to steer business to Diebold, and they sued Blackwell to allow other companies to offer their touch-screen machines. 
 
Matthew Damschroder, director of the Franklin County Board of Elections, also has said that former Diebold contractor Pasquale "Pat" Gallina had boasted of a $50,000 donation to Blackwell’s "political interests." 
 
Blackwell has vehemently denied that allegation, and Diebold officials say they were unaware of Gallina’s activities. 
 
Husted, meanwhile, reported a gift from Joseph Feidner, father-in-law of Columbus lobbyist Dan McCarthy, for staying at his Florida home during a Memorial Day weekend fishing trip. 
 
The speaker took the trip with McCarthy and two other lobbyists during state budget negotiations between the House and Senate last year. 
 
Husted has said the $50 a night he paid is fair market value for the home, prompting Inspector General Tony W. Bledsoe to say that he would investigate to determine whether Husted should have paid more. 
 
But Bledsoe said yesterday that because Husted reported the stay as a gift, there is no need to investigate — even though Husted maintained he paid full value for the stay. Catherine Turcer, legislative director of Ohio Citizen Action, a government watchdog group, said the problem with the trip is that it came at a time when the budget was not finalized, giving certain lobbyists access that others didn’t have. 
 
mniquette@dispatch.com